I Took Out $90,000 In Business Debt And It Didn't Work Out

Brought to you by the EveryDollar App. Start budgeting for free today. I took out some loans for my business last year, totaling about $90,000, and I am unable to afford the payments now, of course. I went through the slow season, being that we are in the deck and that was pre-taxing on funds, and so I'm looking to join a deck consolidation program here that'll reduce my weekly payments from $2,400 down to $1,200. I'd like to do that, but my wife asked me to call you. Oh man, what a motivation call, Steve. So you borrowed $90,000 for what? The deck business. I was looking to scale it. You didn't? No. Going into the slow season here, we did not. Well, I mean, you knew it was a slow season when you borrowed the $90,000. Yes, that's correct. I intended to spend that money on marketing, doing some home shows, upping our marketing budget through that time, bringing on a salesperson, just ramping up the sales and kind of muscling through the slow season with still bringing in revenue, but the weekly payments were just more than what we could handle. The sales didn't go in the same trajectory that I had planned on, and we did very poorly these last couple months in sales. Okay. Well, there's a correlation between doing poorly in sales and the slow time and the fact that you dumped $90,000 in stress on top of your own head, and that affects you running your business well. I've been there, I remember, and it's not a fun thing. So you're really feeling this pinch hard. So what does your business make? What's your gross revenues on your business in a year? So we're going into year four now. We went from $250,000 in 2024 to $350,000 in 2025. I'm sorry, that was around September here. We got to $440,000 at the end of 2025. We did about $100K in sales in September. Okay. So the first thing is, I hope that you've learned your lesson that borrowing money to expand your business is a dumb idea. How much money do you have to make where budgeting is just optional? If you chose C, watch this. She makes about $170,000, I make about $115,000. Hold on, did you go back after you paid off everything, borrow some more money? Oh, yeah. Oh, no, Carlos. We like to go here and there, and we get this Mercedes. Oh, no. We went full South Beach. It's not just about how much you make, it's about having a plan for what you've got. So start budgeting with every dollar for free today. It's a dumb idea. Yeah, I do not intend to do that ever again. Okay. So the next time you get ready to expand, use your profits to expand and don't take as much home or don't expand. One of the two. Okay. Those are your two options. Borrowing money very seldom works, especially in these scenarios, which you've described here. So the magic sauce you thought was marketing and some sales guy, when it turns out listening to your sales numbers, you were the magic sauce. You took a business from 250 to 450 in 12 months. That's pretty freaking incredible. And so that's your answer to get out of this debt is for you to take the business and kick it in the butt and get it going. And if you hire more people to do more decks during the season, that's fine. The debt consolidation loan, I do not know. How did you borrow the 90,000? What kind of debt is it? Credit cards? No, it's, uh, they were, uh, micro advanced kind of loans. They were a, it was a, uh, short-term loan is what it was. So they were short-term loans. Who do you owe the money? Chris was, uh, there's three different creditors. Um, one is, and you want me to name the creditors on here? Yeah. Yeah. Okay. Um, yeah, we had micro advance, um, forward financing, and then we had what I thought was a debt consolidation loan, uh, for tello capital. Okay. So it's good for the, it's good for America to hear these names because if you hear these names run, yeah. Have you contacted a debt consolidation company already? Steve? Yeah. Yeah. Uh, there's one that I plan to work with called, um, it's a coastal debt consolidation. Okay. How far along are you in the process? I haven't signed anything yet. Okay. Good. I don't think it'll work. Okay. Cause what debt consolidation companies do is they typically take credit card debt or consumer-based debt, not small business ripoff debt. And, um, don't pay the payments for a period of time, destroying your credit, and then, uh, renegotiate based on the fact that the loans are in default and get a lower rate or a better payment rate. And that's the only way this is going to happen. They're going to put you into default. And so it's going to do to your credit, the same thing a chapter 13 would do to your credit. A chapter 13 bankruptcy would do the exact same thing. It'll let you renegotiate the payments and put them on a five-year plan and get it where you can breathe, but it's bankruptcy. And the debt consolidation in this case, the way this is laid out, the way these loans are laid out is that way. Um, I wouldn't do it. Instead, what I would do is say, I'm going to look in the mirror and say the secret sauce to my businesses, rapid growth and success is, but has always been not something I can buy with $90,000. And I'm going to strap a tool belt on me and about six other people. And I'm going to go build a whole bunch of decks and I'm going to live on beans and rice and I'm going to pay the whole thing off quickly and get rid of it. Do you have any retained earnings in the business, Steve? Any cash? Uh, no, hardly not at this point, not after a few months of making those payments. When does season pick up for you? I'm assuming spring, summer. That's correct. Yep. Okay. So we're almost there. I mean, it's March. So yes, here in the next six days, I'm going to start booking stuff left and right, taking deposits and start slamming down money on this 90 K and getting rid of it. And I want you to be rid of it in a year. I want you to work all the time. I want you to work so much. You're about to collapse. And that is your answer because filing bankruptcy, or if I using a debt consolidation company, which in this case is going to sound, look exactly like bankruptcy on your credit. And it does for most of you, by the way, you'd go into all these, you know, worn out, tired, retired actors telling you to get debt consolidation on some cable TV thing. And then you go do it. And basically they don't pay the payments for about six months. You pay them and then they start settling the debts and, or they start paying a payment plan on the debts. But by then you're in default on almost everything. And so it trashes your credit. And if you're already at that point that you can't pay the payments and you go in default, then you could be the one to negotiate if you need to, especially with credit card companies. If you want to quit paying them, you could quit paying them, pick out one of the three and quit paying them and let it go into default and then save up a lump sum and settle with them. But these are, these were horrible loans. The whole thing, as you can tell was a horrible idea, but the way out of it is you, I think you have a golden hammer and not swing it. Create your free every dollar budget today. The simplest way to budget for your life.